NVIDIA is the company whose name hides behind every artificial intelligence story, even when it isn't mentioned in it. It doesn't make chatbots. It makes the chips chatbots run on. Understand what NVIDIA sells, and you'll understand who really holds the power in this industry.
NVIDIA makes chips, small silicon wafers that carry out calculations. Its main product used to be chips for graphics cards, the devices that make the picture in computer games look smooth. These chips are exceptionally good at one thing: doing thousands of small calculations at once, instead of one big calculation in sequence. It turned out that's exactly what artificial intelligence needs too. Training a large language model, the program behind chatbots like ChatGPT, is piles of small calculations at once. NVIDIA happened to be holding the exact right tool right when the whole world needed it.
Picture a gold rush. Hundreds of prospectors run along the streams, each sure they'll find the nugget. But none of them dig with bare hands. They all buy shovels and sifting pans from the same store at the start of the trail. It doesn't matter who finds the gold: the store profits from every prospector, no matter who gets rich. NVIDIA is exactly that kind of store, but for artificial intelligence. OpenAI (the company behind ChatGPT), Google and Meta are clawing at each other fiercely for first place, but they buy their chips from the same place.
Today, nine out of every ten dollars NVIDIA earns come from chips for servers built solely to train and power artificial intelligence. It's no longer just a player in this market. It is the market itself. If it stops selling tomorrow, the whole industry stops, not just one of its competitors.
Economists have a term for exactly this: supplier concentration risk, when the survival of an entire market hangs on the goodwill of a single seller. That's exactly the kind of supplier NVIDIA is for artificial intelligence. Except nobody calls it a risk. They call it leadership.
There's one detail
When I read the next story about a breakthrough from one artificial intelligence company or another, I no longer ask which one will win the race. I ask who profits, no matter which one wins. The answer is almost always the same. That's why I watch NVIDIA more closely than most of the companies the story is actually about.